The deal with Hut 8 comes after Chelsea recently received approval from the bankruptcy court to convert into a Bitcoin mining company that will be run solely by its creditors.
Bitcoin (BTC) mining company Hut 8 has entered into a temporary agreement with bankrupt cryptocurrency lender Chelsea Network to build and deploy a new mining facility in Cedarvale, Texas.
This collaboration is a key element of Chelsea’s ongoing insolvency proceedings, which are designed to foster positive relationships with creditors, potentially through financial agreements or equity arrangements.
Hut 8 to build new cryptocurrency mining facility
Hut 8 has been selected to build new facilities for Chelsea creditors, according to an official press release on Monday. Asher Genoot, the company’s president, said the company was chosen for the job because of its track record of successful operations.
“We believe the strength of our Hut 8 managed services business, with 680MW currently under management, coupled with our track record of rapidly building mining infrastructure and operating and optimizing operations efficiently, were key factors in our selection as a partner for this project. “he said.
Construction work is expected to begin in the coming weeks. When completed, the new facility will accommodate approximately 66,000 miners. The site will also be powered by a robust energy supply exceeding 215 megawatts (MW) of total operating capacity.
double aim
Under the terms of the interim agreement, Canada-based Hut 8 will assume a comprehensive role in providing end-to-end development services for the Cedarvale site. The company will also be responsible for site design, engineering, financial modeling, budgeting, accounting, construction management, procurement, logistics and RFP coordination.
Mr Genoot said the reason for the temporary agreement with Chelsea was to achieve the twin objectives of establishing equity with Celesius’ creditors and improving the capabilities of its management services business.
“Our aim is twofold: to build equity with Chelsea’s creditors while also growing the strength and vitality of our managed services business. Once the site is operational, we expect to have over 895MW of infrastructure under our umbrella.” said. Genoot.
Celsius turns into a cryptocurrency mining company
The deal with Hut 8 comes after Chelsea recently received approval from the bankruptcy court to convert into a Bitcoin mining company that will be run solely by its creditors.
This move is part of a comprehensive plan to resolve customer debt. According to the bankruptcy proposal, the management of Celsius’ post-bankruptcy mining operations was expected to be overseen by the United States Bitcoin Corporation (USBTC).
Last month, USBTC merged with Hut 8 to become a US-based company. Before the merger, the company finalized a deal with Celsius to host 8,500 miners on its alpha site in early August.
Celsius was one of the cryptocurrency companies that suffered a liquidity crisis last year during the 2022 cryptocurrency winter, which cost the industry billions of dollars.
The cryptocurrency lender officially filed for bankruptcy protection in July 2022. Former CEO Alex Mashinsky was arrested in July 2023 on charges of securities fraud, commodities fraud and wire fraud later this year.
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